Indian-owned Tata Steel and German steel firm Thyssenkrupp AG have agreed to form a 50/50 joint venture that will create Europe’s second-biggest steelmaker.
The two firms agreed on a Memorandum of Understanding in September 2017, before signing definitive agreements last Friday. Once the merger is approved they’ll operate as Thyssenkrupp Tata Steel B.V.
A statement by the companies said the deal remained subject to merger control clearance in several jurisdictions, including the European Union.
Natarajan Chandrasekaran, chairman of Tata Steel, said: “The joint venture will create a strong pan-European steel company that is structurally robust and competitive.
“This is a significant milestone for Tata Steel and we remain fully committed to the long-term interest of the joint venture company. We are confident that this company will create value for all stakeholders.”
“Potential to safeguards jobs and steelmaking for a generation” – Community
Unions including Community, Unite and GMB have welcomed the deal, saying it represents the best solution to ensure the long-term future of the Tata Steel UK operations.
Roy Rickhuss, general secretary of Community, the steelworkers’ union, said: “As part of this joint venture, we have secured significant investment across Tata Steel’s UK business, including a repair of Port Talbot’s blast furnace number five, which could see it produce steel until at least 2026.
“With a commitment to avoid compulsory redundancies until October 2026, and the first £200m of any operating profit being invested back in the business, this joint venture has the potential to safeguards jobs and steelmaking for a generation. However, this joint venture will only succeed if the necessary strategic investments are made to allow the business to thrive.”
Dr Heinrich Hiesinger, CEO of Thyssenkrupp AG, added: “We will create a highly competitive European steel player – based on a strong industrial logic and strategic rationale. We will secure jobs and contribute to maintaining value chains in European core industries.”
Main image: Tata Steel’s Lllanwern Works, Magor, South Wales. ©Tata Steel